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Consumer confidence recovers in August

by: Joanna Faith
  • 31/08/2016
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Consumer confidence recovered in August after falling in the aftermath of the Brexit vote.

Market research firm GfK’s Consumer Confidence Index increased by five points this month to -7  from -12 in July and -9 immediately following the vote.

The uptick in confidence was driven by good economic data, historic low interest rates, falling prices and high levels of employment, GfK said.

The Savings Index, however, fell by 16 points to -15 in August, 17 points lower than this time last year.

Joe Staton, head of market dynamics at GfK, said the figures show Brits are “determined to carry on shopping for today rather than saving for tomorrow.”

He said: “We’re reporting some recovery in the Index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK.”

While the figures may indicate confidence has returned post-Brexit, Laith Khalaf, senior analyst at Hargreaves Lansdown, warned against placing too much significance on early data points.

It’s still very early days. Judging the economic impact of Brexit right now is a bit like predicting the winner of the Premier League based on who’s at the top of the table after the first couple of games,” he said.

However, he said the more robust economic data that comes out, the more the Bank of England will be wondering whether such an early interest rate cut was entirely necessary.

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